Pre-Fed jitters ruled the markets. The indices remained largely rangebound. Nifty closed at 4,533 up 20 points, while the Sensex shut shop at 14,833 up 24 points.
E Mathew of Mathew Easow Fiscal Services is positive on ITC, HUL and RPL.
“We may be in the process of bottoming out. We are taking all our cues from the Dow. The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) went almost as high as 33, which is a clear indication that the volatility index is peaking out. It also points out that the Dow has already bottomed out, if it is not close to bottoming out. A lot of hope hangs out for the Nifty. If we are able to sustain above 4,530-4,540 in the near future, it may be a process of base-formation. If we plunge below the January lows again, we may be heading towards 4,200 or possibly lower,” said Mathew.
Here’s how E Matthew views the stock on board:
On ITC and HUL:
The charts have certainly shown strength and they didn’t really breakdown in this carnage also.
ITC has been far above the low of Rs 165-168, which it had touched on January 22. The stock has the potential to be a Nifty outperformer. If the Nifty starts moving up from here, we could see ITC go up all the way to Rs 204.
It is a buy on declines opportunity, as far as ITC and HUL are concerned.
On Orchid Pharma:
Most of the pharmaceutical stocks are looking good. Of course, Orchid Chemicals is an exception. Unfortunately, the incident in Orchid is being utilized as an opportunity to paint some of the smaller pharma companies with the same brush, which is not fair.
On Ranbaxy:
Ranbaxy is showing short-term weakness. But if it drifts by Rs 10-15 odd from the current levels, it would also qualify as a buy on declines rather than a sell on rise.
On RPL:
RPL was showing quite a lot of strength till yesterday. In this recent carnage, it went nowhere near the January 22 low. Today, some negative news did come. But in spite of that, the stock has got very strong support at the Rs 140-142 zone. This stock has potential if the Nifty is in the process of consolidating and it starts moving up. If it takes the positive cues globally, we could see Reliance Petro possibly move up to Rs 165 and beyond that all the way up to Rs 172-175.
On JP Associates:
If you compare JP Associates with RPL, is not showing that kind of strength. But having said, the stock has been extremely oversold. If one is looking for something like a trading bet, possibly at lower levels, if it comes down to about Rs 185 zone, keeping a stop loss of around about Rs 180 odd, one could take a short-term punt into this.
On Bajaj Hindusthan and Balrampur Chini:
Bajaj Hindusthan and Balrampur Chini qualifies as a buy on declines. In fact, Balrampur has got very strong support at around Rs 70-74 zone. That incidentally becomes your stop loss also. On a market sell-off, one could possibly accumulate the stock.
One could play for a bounce up all the way to the Rs 86-88 zone. That is the stiff resistance zone. Beyond that, one could look at Rs 95 too. As of now, Balrampur and Bajaj Hindusthan and the entire sugar sector is still not showing the sort of weakness which one is seeing in quite a few of the other sectors.
Disclaimer: It is safe to assume that my clients and I may have an interest in the stocks/sectors discussed.
Source: Moneycontrol.com
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